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Nelson: Let taxpayers deduct medical costs for staying healthy

Biz Perspective

With the current partisan makeup and air of incivility in Congress, we likely can expect our senators and representatives to be as useless as candles in a burning house.

Perhaps we really are better off with politicians not legislating, but it's difficult not to foster a feeling of dread regarding the serious problems this country faces, especially with the economy still in tatters, and with the lack of seriousness with which our elected officials approach finding adequate solutions.

But as long as President Obama is going to let fearmongers hijack the health care plan, and the Democrats' leaders are willing to sell it to the highest bidders, there will be no traction on health care reform.

Under current tax law, in order for a taxpayer to deduct medical expenses from his income tax, his medical costs must exceed 7.5 percent of adjusted gross income. (The rate is 10 percent if you are subject to the alternative minimum tax.) If you are able to reach that 7.5 percent level, you only can deduct those costs that exceed the 7.5 percent. It takes some pretty hefty medical bills before most people can reach the limit to take the deductions. And, in order to apply those deductions, a taxpayer has to itemize each medical expense.

Also under current law, flexible spending accounts allow people to reduce their taxable income by setting aside money from their paychecks (before being taxed) to pay for medical costs.

That money has to be used for medical expenses. Flexible spending only is available, however, through insurance plans.

For those people who do not have flexible spending accounts or insurance or other options, medical expenses should be tax deductible. Pharmacies already designate certain products bought at their stores as flexible spending items. It would be easy enough to track those expenditures.

If Congress isn't going to give us any other relief from rising insurance rates and medical costs, at least let us reduce our tax liability by deducting any and all expenses we accrue for medical needs.